Raise or fold?
September 20, 2012 5:10 PM Subscribe
Should I exercise my time-limited stock options? I can afford it, but not without unease. I think it's a probably a good investment, but I have trouble determining how good. Details within.
posted by anonymous to Work & Money (18 answers total) 1 user marked this as a favorite
I worked for a startup, then left about half a year ago. Today, I was informed that some of my options have vested, but I have to exercise them in 90 days.
The decision is difficult because I think it's likely that they will either issue an IPO or be bought, but I really can't quantify how likely this is. If they do, the ROI is big, even if it the price is $1/share. If they don't, I don't get anything. But without being able to make a reliable guess at how likely, it's hard to assess the value.
Other facts of the case:
- The strike price is about $0.25 per share. I have options for about 5000 shares.
- It is a competently run, profitable company that has stated to its employees that it plans to go public someday. (I realize that a million companies have made and broken this promise, and in fact, worked at one of them for several years.)
- The CEO taken his previous companies public or sold them. None of them have been driven into the ground.
- I'm in a sort of fixed income situation. I have been working on a project since leaving the company that is still not completed and not making any money. My spouse (who also does not know exactly how to decide this case) has been earning income that's covered our expenses, and savings remains fairly unaffected. (I am fairly confident that I can get work once my project wraps.) Using $1250 to exercise the options would not take food out of anyone's mouth, but it does make me uneasy.
Should I let this go? Should I get on this?